BBWI Q2 2027 Earnings Call Transcript

Interim Chief Financial Officer Tom Javitch and Vice President of Investor Relations Luke Long opened the Bath & Body Works Q2 2026 earnings conference call by introducing Daniel Heaf, Chief Executive Officer. The call was recorded and a slide presentation summarizing the information was shared on the company's website.

Heaf reported that the company's second quarter results exceeded expectations. Net sales declined 2.3%, surpassing the guidance range of a 5% to 3% decline. Adjusted earnings per diluted share were $0.62, above the guidance range of $0.20 to $0.25. The $80 million in tariff refunds received contributed to this outperformance. Excluding the benefit of the refunds, adjusted earnings per diluted share would have been $0.31, which was $0.06 above the high end of the guidance range.

The Consumer First Formula, introduced nine months ago, is showing progress. During this quarter, the formula yielded sequential improvement in body care, a return to growth in digital, and accelerated growth in expanded distribution. However, these improvements are not yet broad enough to indicate an inflection in the overall business.

For the second half of the year, the company has narrowed its full year net sales guidance by increasing the low end to a 4% decline while maintaining the high end at a 2.5% decline. Additionally, adjusted earnings per diluted share guidance has been raised to $2.60 to $2.80.

Strategic priorities for the second half of the year include creating innovative and disruptive products, strengthening the underlying drivers of sustainable growth, and closely monitoring leading indicators to ensure actions are effective before aiming for revenue growth in 2027. The launch of Fruit Fusion, a new body care franchise, was a key product innovation that exceeded sales expectations and achieved a higher AUR than the core fragrance body care assortment.

Fruit Fusion is designed to be an enduring franchise, with additional fragrances planned for September and form extensions in 2027.